The possibility that Europe will impose tariffs on Chinese solar panel producers could not have come at a worse time for tellurium market stakeholders.

After five years of falling prices and rapidly-growing global solar panel demand, Chinese solar panel producers could soon feel the pinch after a second complaint was launched by European solar industry group EU ProSun.

The group’s president, Milan Nitzschke, charged that “China seeks a monopoly in the solar sector and subsidizes the local industry with billions,” Bloomberg reported late last month. EU ProSun hopes that construction waste processing plant the European Commission will take punitive action by imposing tariffs on what it believes are anti-competitive activities on the part of Chinese producers.

In May of this year, the US government imposed tariffs of 31 to 250 percent on Chinese solar panel imports after it was alleged that government subsidies were allowing producers preferential market access compared to their US counterparts.

The tariff could have a long-term impact on the United States’ 7 percent share of China’s solar product exports, which were worth about $2.8 billion in 2011. The US Commerce Department is expected to render a final ruling on the tariff on October 10.

However, the European Union’s (EU) investigations into solar panel “dumping” — the selling of goods below cost on international markets — could carry a much larger impact.

Currently about one-third of China’s total solar production — along with about 7 percent of all Chinese exports — goes to the EU, Reuters reported last week. Europe is by far one of the most advanced solar markets, with Germany alone accounting for 27.3 percent of global solar installations. The EU solar market as whole was valued at approximately US$27 billion in 2011.

China’s solar companies

Outside international tariff developments, China’s large-scale solar expansion is facing the consequences of massive industry support from the government.

China Development Bank, a state-owned lending agency geared toward promoting official policies, has extended US$43.2 billion in credit lines to 12 Chinese solar companies since 2010, according to data compiled by Bloomberg New Energy Finance. Numerous other companies have also received funding from local and provincial governments, which has led to the creation of dozens of solar panel producers.

steel slag dressing equipment This level of state-based financing is raising concern for Chinese government officials because falling panel prices mean that some producers have experienced losses of up to $1 for every $3 of sales this year.

The inevitable correction to overcapacity will not be an insignificant event, Boston-based GTM Research said. The renewable energy consulting firm estimates that Chinese companies have the ability to manufacture 50 gigawatts of solar panels this year; of that amount, 4 to 5 gigawatts will be consumed by China’s domestic market, while another 18 or 19 gigawatts will be destined for international markets.

Panel prices have fallen by three-fourths since 2008, and Li Junfeng, longtime director general for energy and climate policy at the National Development and Reform Commission, recently told The New York Times that up to two-thirds of Chinese panel producers are now facing an uncertain future.

Tellurium impact

The downturn in solar markets has carried knock-on impacts for tellurium markets this year.

Earlier this year, Chinese tellurium producers said that they are unable to accept prices below the C$200/kg level, a move that saw some companies refuse to sell refined materials. Tellurium markets, which until recently have been guided by end uses beyond solar markets, have slowed substantially due to cutbacks in solar panel production.

But that, said Deer Horn Metals (TSXV:DHM,OTC Pink:GODYF) Chairman Tony Fogarassy, is only a temporary trend for tellurium suppliers. “[D]espite the recent shakeout in the solar industry, looking 10 or 15 years down the road, solar power will play a much larger role in the world’s energy supply,” Fogarassy said in a June interview.

The British Columbia-based tellurium junior miner is hoping to become one of the select few miners devoted primarily to tellurium production. Currently, Boliden’s Kankberg mine and a tellurium mine owned by a solar panel company located in China are the largest tellurium-focused mine developments.

Deer Horn believes focused mines like its tellurium resource in BC’s north-central region will be prized by companies like First Solar (NASDAQ:FSLR) once unprofitable solar producers are priced out of the market.

With Qatar exporting leftover short-term deliveries to the UK and sending an increasing majority of its liquefied natural gas (LNG) to higher paying Asian customers, Britain could be in danger of suffering a long-term loss of LNG supply, according to Reuters.

Analysts and British energy companies have stated that the strategy rewards Qatar, but puts Britain at a significant disadvantage. Qatari shipments provided a quarter of Britain’s gas needs in 2011. kaolin process equipment

“Preliminary estimates for the first half of 2012 suggest that LNG imports in Europe were down a quarter compared to the same period of 2011, with the UK reduction close to 43 percent,” energy consultants Wood Mackenzie said in a research report.

US natural gas futures edged higher on Monday in mixed trading, supported by dropping temperatures that have stimulated early heating demand. Meanwhile, record high supplies and a milder mid-month weather outlook limited the upside.

The front-month contract, which posted a 2012 high of $3.546 per million British thermal units (MMBtu) last week, has risen nearly 20 percent in the last two weeks as traders anticipated the season’s first cold snap. With inventories at record highs for this time of year and production near an all-time high, most traders have issued caution on the upside, particularly with the early chill expected to be short-lived.

“It’s all about weather and this is the first good slug of (cold) weather we’ve had. But (longer-term) forecasts don’t look that supportive,” said Tom Saal at INTL FCStone in an interview with Reuters.

The November natural gas contract gave back most of its gains from the previous session and is down a cent to $3.40/MMbtu on NYMEX. On the US spot market, gas at Henry Hub fell four cents to $3.19/MMbtu.

Baker Hughes data shows that the gas-directed rig count rose by two last week, to 437, barite dressing equipment after sliding to a 13-year low two weeks ago. It was the second gain in three weeks, but only the eighth time this year that the gas rig count has risen. The count is still down 53 percent since peaking at 936 last October.

Data released by the US Energy Information Administration last week shows that domestic gas inventories for the week rose by 77 billion cubic feet (Bcf) to 3.653 Tcf. At 86 percent capacity, storage is hovering at a level not normally reached until the last week of October, offering a significant surplus that will be used to offset any weather-related spikes in demand.

Boone Pickens, a well-known energy investor that chairs the hedge fund BP Capital Management, has forecast that natural gas prices will move up to $4 per MMBtu by the end of 2012 from the current price of $3.20 per MMBtu.

Though the market was fairly quiet in August, the fall of polished prices moderated. The RapNet Diamond Index reported price declines of less than 1 percent for 0.30, 0.50, 1 and 3 carat weights at the beginning of September. But looking at the year-on-year figures reveals a gloomier picture as all of those categories posted double-digit declines. 1 carat diamonds, for example, are 16.7 percent below price levels from this time last year.

Diamond sellers were hoping the Hong Kong Jewellery & Gem Fair, how to find the cost of stone crushing machine in India which ran from September 19 to 23, would provide a positive indication of the times ahead. If graded on that criteria, however, the show would likely be deemed a disappointment as one of the most notable takeaways was that there is demand for inexpensive, low-quality goods, especially from Far East buyers.

That is but one reminder that the market remains sensitive to prices. Another is the strengthening demand for fancy diamonds in the US as the market for round diamonds continues to deteriorate.

Fixating on diamond prices could be a distraction for those in the diamond business, according to Martin Rapaport, chairman of Rapaport Group. Two common problems weighing on the industry are weak demand and tight margins. Branding could be the solution for both. Indian jaw crushers 600×900

Strong market conditions can facilitate rampant participation without requiring well-developed business strategies. When the tides turn, as they have this year, those thriving on the boom can find themselves fighting for survival. But what would happen if diamond sellers stopped gambling on prices and started building brands? Some suggest the outcome would be a much higher, more sustainable degree of success.

“If you are really a good value-added person in the diamond or jewelry industry, prices should not matter,” Rapaport told the Las Vegas crowd attending the State of the Diamond Industry presentation.

Mehul Choksi, chairman of Gitanjali Group, which consists of numerous jewelry brands, is another advocate of branding, and the business he oversees is an excellent example of the outcome.

“I wasn’t interested in selling a commodity. I wanted to sell a brand,” Choksi told Forbes in 2008, when his company’s revenue was expected to top $1 billion.

Choksi has maintained his stance, telling those at this year’s Rapaport International Diamond Conference, “[w]e want to sell each diamond at a better value and this is achieved by branding.” He believes that branding is the most effective way to reveal that emotional appeal of diamonds.

Sellers should realize that competition is not limited to peers in the diamond industry, but extends to others in the luxury space. Many consumers are willing to place premiums on branding. They flock to brands when purchasing shoes or cell phones. Diamond sellers are encouraged to ponder why shopping for diamonds should be viewed differently.

Branding is a strategy that could be used to lure more people toward the diamond industry and then to further streamline that interest toward particular businesses.

Miners dissatisfied with rough diamond prices or demand should shake off any notions that brand building is best left to retailers. India cone crusher prices The diamond business is built on selling stories of love, of wealth, of rarity, of whatever moves the precious stones through the pipeline.

“[S]ell the story of the diamond, rather than just focus on the four C’s,” Vikram Merchant, manager of Rio Tinto’s (ASX:RIO,NYSE:RIO,LSE:RIO) Mumbai office, said at the Rapaport conference.

Rio Tinto is doing more than contributing to the conversation about branding; the company is pinning its hopes on Nazraana. The branding initiative, which is focused on the Indian market, particularly the wedding segment, “takes its reference from the royal gift giving rituals of past eras,” a company press release states. Rio Tinto has teamed up with manufacturers, diamantaires and jewelry retailers to create a “Nazraana experience.”

Those needing further inspiration can look to diamond marketing pioneer De Beers. There are big plans in the works for the Forevermark brand this Christmas season. A commercial developed for “The Center of My Universe” line will be shown online, in thousands of movie theaters, on television and in stores.

This new product concept is aimed at the emotional appeal of celebrating “the woman.” However, Charles Stanley, president of Forevermark US, revealed that the brand also feeds off the drive for social responsibility.

“The Responsible Source Promise that we have behind Forevermark, that promises a diamond has been cared for from the moment it’s mined all the way through the cutting, the polishing, to the point that it’s at the jewelers I think is really important and plays directly into that need and sense of reassurance of the provenance of high-value luxury consumers today,” he said in an interview about the campaign.

Companies such as Rio Tinto and De Beers can focus on strategy because they have brands to push. That gives them a sharp competitive edge. copper ore ball mill in India Throughout the distribution chain, diamond sellers should consider whether branding is a strategic move that they too should make. These considerations should begin at the the mine and even before the mine. Junior miners should seriously analyze the potential benefits of developing not only diamond mines, but also diamond brands.

Keep in mind, however, that branding, more than creating a unique identity or story, is an effort to add value to a product. Brands thrive when they are successful at doing that.

Nickel has gained ground in the past month, with spot prices rising from US$16,430 a metric ton (MT) on the London Metal Exchange to $18,275 on Tuesday, according to Metal-Pages.

The rise puts the metal roughly back where it started the year. And prices could move higher still, according to Bart Melek, head of commodity strategy at TD Securities. That is largely due to the increasing urbanization of China, which consumes 40 percent of the world’s nickel output. Even though the country’s economy is slowing, it is “not collapsing,” said Melek. jaw crusher for Indian quarry

The economist is also forecasting 3 percent growth for the global economy as a whole in 2012 and 4 percent next year. “Anything over 3 percent is a good news story for commodities,” he said.

Nickel prices could also gain as companies close producing mines. For example, this week, Xstrata (LSE:XTA) said it will close its Cosmos nickel mine in Western Australia due to lower nickel prices and the high Australian dollar. So far this year, the mine has produced 4,200 MT of nickel concentrate.

In addition, Russia’s Norilsk Nickel (MCX:GMKN), the world’s largest producer of nickel and palladium, said it will cut its overall investment program by 10 percent in 2012 due to weaker metal prices.

Nickel Market Update

Nickel has gained ground in the past month, with spot prices rising from US$16,430 a metric ton (MT) on the London Metal Exchange to $18,275 on Tuesday, according to Metal-Pages.

The rise puts the metal roughly back where it started the year. And prices could move higher still, according to Bart Melek, head of commodity strategy at TD Securities. That is largely due to the increasing urbanization of China, which consumes 40 percent of the world’s nickel output. Even though the country’s economy is slowing, it is “not collapsing,” said Melek.

The economist is also forecasting 3 percent growth for the global economy as a whole in 2012 and 4 percent next year. “Anything over 3 percent is a good news story for commodities,” he said.

Nickel prices could also gain as companies close producing mines. Indian mining equipment industry For example, this week, Xstrata (LSE:XTA) said it will close its Cosmos nickel mine in Western Australia due to lower nickel prices and the high Australian dollar. So far this year, the mine has produced 4,200 MT of nickel concentrate.

In addition, Russia’s Norilsk Nickel (MCX:GMKN), the world’s largest producer of nickel and palladium, said it will cut its overall investment program by 10 percent in 2012 due to weaker metal prices.

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Columnist Amine Bouchentouf is a partner at Parador Capital LLC, an institutional advisory firm focused on commodities and emerging markets. He is the author of the bestselling Commodities For Dummies, published by Wiley. Amine is also the founder of Commodities Investors LLC, an advisory firm dedicated to providing insightful information on all things commodities.sand making machine

An unprecedented drought in the United States has resulted in price spikes across a number of key agricultural commodities, including crucial grains such as corn, wheat, and soybeans. This drought, which has ravaged much of the Midwestern United States, including the all-important Corn Belt, has caused price shocks not experienced in years. In fact, a drought of this ferocity has not been seen since the 1950s! In this edition, the Commodity Investor examines the consequences of this drought for commodities and offers solutions on how to best handle this exceptional event.

A drought of this magnitude doesn’t come along very often. Specifically, the last time we saw a drought like this was in 1956. More than 50 years later, despite all the technological improvements and industrial developments, we are still reliant on basic factors such as the weather. While we’re far from the Dust Bowls of the 1930s, which rendered whole states barren and unproductive, this drought is causing severe disruptions in global agricultural markets.

Since the drought began in the United States in the middle of June, prices for critical agricultural commodities have gone through the roof. Since June, soybeans are up a record 24 percent, wheat prices are up 41 percent, while corn prices are up 59 percent! While these astronomical and abnormal price swings are not sustainable in the long run, they do create short- and medium-term price distortions that are extremely disruptive to the marketplace.

Many countries, international organizations, and NGOs are worried that these types of price swings can result in higher food prices across the globe, hurting consumers around the world. We are seeing higher prices for food staples, but the transferring of higher food prices to the kitchen table isn’t as straightforward as many think. For example, when corn prices go up it is more likely for the price of milk to go up rather than the price of cereals or cornflakes. Why? Because the corn used in cornflakes is processed and enhanced using starches and other additives that aren’t subject to the same kind of price swings.

On the other hand, these price spikes have a direct impact on the corn that farmers use as grain feed for cows to produce milk, meat, and other dairy products. As farmers pay more for the corn they feed to their livestock, prices for milk and other products will increase. Therefore, while fears of higher food prices are real, they are much more complex to quantify than you may think. Furthermore, as I examine in the section below, the market is a self-regulating mechanism and has ways to deal with such price swings.

Winners and losers

Already we’re starting to see major market realignments as producers and consumers seek to adapt to this new environment. Japan, for example, is the largest importer of corn in the world. Japan is one of the few industrialized countries that imports almost all of its corn consumption needs. While Japan is a leading exporter of high-end finished products such as cars and consumer electronics, it has not been blessed with any significant natural resources. Jigging Machine Introduction Indeed, Japan must import large amounts of corn, wheat, and soybeans to sustain its population. In fact, Japan also imports almost all of its oil and natural gas demands as well.

The biggest supplier of corn to the Japanese has traditionally been the United States. In any given year, the US may supply up to 80 percent of Japanese corn imports — up until the drought started in June this year, the US supplied 85 percent of Japanese corn imports during the first half of 2012. As the drought started rearing its ugly head, prices in the United States began to skyrocket. As a result, Japanese corn buyers began diversifying their purchases and started looking elsewhere for their corn supplies. Enter Brazil.

Brazil isn’t currently experiencing the scorching drought that its North American counterpart is going through. As a result, its corn is priced way below that of American farmers; in some cases, Brazilian corn is $20 to $30 cheaper per ton than American corn. Since Brazil has an important export base, Japanese buyers are now shifting their purchases to Brazil and away from the US. Japan, which imports about 15 million tons of corn per year, may import one million tons or more from Brazil this year, up more than 25 percent year-on-year. That is a direct result of the drought in the United States.

And that’s a key component of any disruptive market event: it will create winners and losers, and it’s up to the astute investor to determine which market participants will benefit from disruptive events and establish positions that will benefit from these market trends. With this in mind, the Commodity Investor currently likes Brazilian grain producers and exporters as they are uniquely positioned to pick up the slack and replace corn that’s affected by droughts in the United States, India, and other key producers.

One company that has a strong and increasing presence in the Brazilian grain space is CHS (NASDAQ:CHSCP). Although it’s based in the United States, CHS has a very large footprint in Brazil. It owns a logistics and distribution company that’s operational throughout Brazil; it also owns a fertilizer storage and blending service company in the South American nation, and it recently acquired a large grain distribution and export company.

In addition, CHS has operations in the United States, so it can alternate between strong revenue generation as the cycle shifts between these two agricultural powerhouses. Founded and run by a farmer’s cooperative, you can be sure that management knows what it’s doing in the space. The stock has performed solidly, up 12 percent in the last 12 months. And a quarterly dividend of $0.50 is an extra sweetener for this stable stock.

gold ore crusher “In our view a mine or deposit is an asset no different than a farm, commercial property or financial security,” says Natural Resource Holdings (NRH) in its Global Gold Mines & Deposits 2012 Ranking. Yet when it comes to gold there are only 439 assets that meet the industry-perceived economic threshold of 1 million ounces, the report says. This figure, and the seeming abundance of gold that it implies, may come as a pleasant surprise to many investors, but NRH concludes that a quality gold deposit remains a rare find.

For its research, NRH set liberal criteria, such as allowing the inclusion of inferred resources and assets that are primarily copper deposits. Still, only 439 assets in the world were found to contain over a million ounces of gold. Of these, 189 are already producing mines, leaving a global base of 250 undeveloped gold assets in the world. 166 of these are identified as being owned by junior miners.

NRH encourages investors seeking leverage to focus on the junior companies as they provide the best exposure to a rising gold price environment. But the report also urges investors to incorporate additional metrics in their investment strategies.

166 undeveloped assets could paint an overly optimistic picture about the outlook for future gold production, but the report serves as a reminder that that there is much more to a mine than knowing where the gold is.

Investors have another reason to consider harnessing expectations that future gold production will be comparable to today’s operations. NRH quickly confirmed that the gold industry is facing a trend of lower grades. With the grades of undeveloped deposits found to be markedly lower than those of producing mines, the reports says there is an assured need for higher energy input in the future if current production levels are to be sustained.

Investors are also strongly encouraged to consider infrastructure.

“Even high grade deposits with no infrastructure are inferior to easily mined bulk tonnage deposits with close proximity to infrastructure in stable geopolitical jurisdictions,” the NRH report says. iron ore crusher

As an example, the report describes Barrick’s (TSX:ABX,NYSE:ABX) Cerro Cassale asset in Chile, which contains 32.5 million ounces. Due to its remote location in the Maricunga desert, NRH says Barrick has had to budget over $500 million for a pipeline simply to transport water from point to point.

While Barrick may be able to entertain such an idea, it certainly provides a thinking point for investors in the gold juniors.

World Exploration Trends 2012, a report by Metals Economics Group (MEG), revealed that junior miners were able to raise $7.4 billion for exploration from Q4 2012 through H1 2011. According to MEG, during this period of robust exploration spending the most common target in most regions was gold.

Exploration trends, like many aspects of business, vary with economic conditions, says MEG. During good times, such as 2011, when companies had ample access to cash, they display a greater appetite for risk. Thinking of the potential rewards, companies are willing to explore in riskier and more obscure places.

But investors need to consider what happens when the economic tides change. According to MEG, exploration in high-risk countries, particularly early stage work, is usually the first to be cut.

Investors should carefully consider their support for junior efforts in areas where project development would require substantial amounts of infrastructural spending. Even if junior miners are successful in finding deposits in obscure places, investors must consider whether those companies are likely to secure enough financing to also cover the needed infrastructure. If not, then the next question is whether the potential discovery is likely to be attractive enough to market the asset for partnership or for sale to a major gold company.

NRH says that producer balance sheets are so large that they require significant projects to be accretive, making even most 1 to 2 million ounce deposits unattractive.

Geopolitical and permitting risks are other metrics investors are urged to consider. Many companies own assets that may seem attractive when considering the resources or the grades, but in actuality they face serious headwinds to becoming anything more than a bullet point in a portfolio.

According to NRH, five undeveloped deposits — Pebble, Reko Diq, Donlin, KSM, and Rosia Montana — represent nearly 20 percent of the undeveloped ounces cited in the report, but these assets may not become mines for 10 to 30 years because they face permitting headwinds.

gold mining equipment Realistically, NRH says 50 percent or more of the deposits in the database will most likely remain deposits 25 years from now, for various reasons.

Barring multiple high-grade, multimillion ounce discoveries each year, a significant increase in gold production is unlikely, says NRH. Few are expecting that to happen. 2011 brought higher exploration spending, which allowed more drilling, but MEG found that the average portfolio size changed little.

Quality gold deposits continue to be a rare occurrence. NRH’s report serves as a good resource for gold mining investors, but it is also as a reminder that a comprehensive list without a comprehensive strategy is about as good as a gold mine without pipes.